For employers sponsoring migrant workers, salary compliance can sometimes appear deceptively straightforward: check that the employee's salary meets the applicable threshold and going rate, and make sure they are paid that amount.
In practice, the rules can be more complicated. The Home Office during an audit will want to check salary payments against both the amount stated on the Certificate of Sponsorship (CoS) and the worker's actual working pattern. Employers should therefore take care to ensure that payroll arrangements continue to reflect the assumptions made when the worker was sponsored.
Salary must be paid consistently
The Home Office states that it will regularly check that sponsors are paying workers at least the salary stated on their CoS, including through compliance checks and checks directly against HMRC records. For Skilled Workers, the worker must also generally be paid the required salary in pay periods of at least monthly frequency, unless a different frequency is specified, e.g. if their working hours/pay varies from month to month, if they are paid weekly, etc.
This means that an employer must not assume that an employee might simply be paid less than the required amount for several months and then have the shortfall corrected later with a one-off payment.
Overtime can create a less obvious problem
Employers should also be careful where a sponsored worker is routinely working more hours than those stated on their CoS.
The going rate for most occupations is based on a 37.5-hour working week and is pro-rated according to the weekly hours stated on the CoS. Importantly, however, all of the worker's weekly hours are taken into account when assessing the going rate.
For example, suppose a worker is sponsored for 37.5 hours per week at a salary that is exactly sufficient to meet the applicable going rate. If the worker regularly needs to work late and isn’t paid for those extra hours, this could lead to the salary being insufficient on a pro-rata basis. The Home Office will look at the hours actually worked, not simply what is stated in the contract or CoS.
For example, if a going rate is £45,000 for 37.5 hours, a worker actually working 45 hours would need to be paid £54,000 to meet the full going rate requirement:
£45,000 ÷ 37.5 × 45 = £54,000.
What should employers do?
This does not mean that every occasion when an employee works late requires a salary review. However, companies should be able to explain to the Home Office (e.g. during a compliance audit) how they monitor the working hours of their sponsored migrants to ensure that the salary remains correct according to the actual hours worked. The issue is particularly likely to arise where unpaid overtime or additional hours become a regular feature of the worker's working pattern.
Employers should therefore consider:
- whether the hours stated on the CoS continue to reflect the worker's actual working pattern;
- whether employees sponsored at or close to the minimum salary are routinely working additional hours;
- whether overtime is paid and, if so, whether the resulting remuneration is sufficient for the applicable salary calculation;
- whether formal changes to working patterns or contractual arrangements need to be reported to the Home Office; and
- whether payroll records demonstrate that the worker is being paid in accordance with the sponsorship requirements.
For sponsors operating on relatively tight salary margins, this is particularly important. An employee who is sponsored at precisely the minimum salary but routinely works significantly more hours than anticipated could create a compliance issue even though their annual contractual salary has not changed.
Regularly reviewing sponsored workers' salaries, hours and payroll records is therefore a useful part of maintaining sponsor compliance — particularly following internal restructures, changes to working patterns or periods of sustained overtime.
How 3CS can help
Our expert immigration solicitors can assist with these issues. 3CS has one of the largest immigration consultancy teams in the UK – including 4 specialist immigration lawyers. For assistance, please get in touch today.
